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I got it working using http://localhost/test but the only problem is the PHP page when viewed does not display how it should, for example if the text is styled "white" it's shown as "black" how come ?

You probably have absolute paths to CSS. If you reference CSS files as /css/styles.css then it looks for xampp/htdocs/css/styles.css rather than xampp/htdocs/test/css/styles.css because xampp/htdocs/ is document root.

Have a look at the link to a thread in my previous post. I explained in it how to set up virtual hosts in XAMPP.

The page thus far is very simple, all I have is a <h1> tag colored white and a background of blue, the blue background shows up fine but the <h1> tag shows up not as white but as black, in the PHP page.

Edit

I fixed it, it was because I had made my <h1> tag as a <id> so I had to remove the pound symbol and all was fixed